Kiev, June 30, 2003—The International
Finance Corporation (IFC), the private sector financing arm of the World
Bank Group, signed an agreement today to provide a $15 million Guarantee
Facility to HVB Ukraine (a member of HVB Group).
This is the largest IFC’s investment in Ukraine’s financial sector, and
the first IFC Guarantee Facility in the former Soviet Union. IFC’s guarantees
will allow the bank to double a loan amount it can provide to a single
client from $3 million up to $6 million and help the bank meet the growing
needs of its Ukrainian clients, who are now requiring larger funding as
a result of continued economic recovery in the country. These loans will
be primarily used to finance new investments such as capacity increases,
plant upgrades and other improvements in the agribusiness, manufacturing,
and service industries.
"This Guarantee Facility will enable HVB Ukraine provide larger and
longer-term financing to a broader base of Ukrainian private enterprises.
Ukrainian companies’ growth is constrained by the lack of term financing,
which is needed to upgrade and expand production. IFC’s strategy is to
stimulate growth in the financial sector in Ukraine to support the country’s
economic development", commented Mr. Edward Nassim, IFC’s Director
for Central and Eastern Europe.
“IFC guarantee facility allows HVB Ukraine to develop further its core
specialization in corporate financing. The facility will be used specifically
to finance the medium-term borrowing needs of Ukrainian private sector
companies across a range of sectors. It will help us increase our client
base and diversify our lending portfolio,” said Mr. Gerd Wriedt, Chairman
of the Management Board of HVB Ukraine.
HVB Ukraine has been represented in the second largest country in Europe
since August 1998. 70 employees in the head office in Kiev serve approximately
300 corporate customers. Shareholders in the bank are HVB Group which holds
a 91.2% stake and IFC with an 8.8% interest. HVB Bank Ukraine is working
profitably and is currently expanding its operations in Ukraine.
Last week the bank opened a branch office in Kharkiv, the second
largest city in the country. With more then 1 million inhabitants, Kharkiv
is the economic center of the region. "Opening the branch office in
Kharkiv is the starting shot for expanding our branch network in Ukraine,"
says Gerd Wriedt, Chairman of the Management Board of HVB Ukraine. Further
branches will be opened in Odessa and Dnepropetrovsk this year. Still more
are planned for 2004 and 2005.
The mission of IFC is to promote sustainable private sector investment
in transition economies, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the emerging markets,
mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY02 (July 1, 2001 – June 30, 2002), IFC has committed
more than $34 billion of its own funds and arranged $21 billion in syndications
for 2,825 companies in 140 developing countries. IFC's worldwide committed
portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion
held for participants in loan syndications.